HyreCar allows people to rent out their idle vehicles to people who want to drive for companies such as Lyft or Uber.

HyreCar Inc.

A few years ago Joe Furnari found himself with a car he barely used, but was stuck with a big insurance bill. Through a Google search he discovered a new Los Angeles-based company called HyreCar that would rent out his car to Uber, Lyft, or other ride-share drivers in need of a vehicle.

“As I’m handing off the keys to the driver, and (a HyreCar founder) comes running up to me,” Furnari related in an interview. “He says to me Joe, Joe, this is great. This is a perfect concept. You’re the first person to rent a car on our platform. I think oh, boy, I’ll never see that car again. Probably be chopped in Mexico.”

But, as Furnari recalled, his car wasn’t chopped in Mexico and after just six weeks on HyreCar he had a thousand bucks in his pocket. “I thought, wow, this is a viable business.” Furnari stuck with HyreCar and now he’s the publicly-traded company’s CEO.

HyreCar’s concept is simple. Through its website, ride-share drivers who need a vehicle register and are matched with a vehicle owner in their area willing to rent out their car when it would otherwise be sitting in a lot or garage.

“Consumer habits are changing,” Furnari explained. “It’s moving away from an ownership model to rental model. People need cars to participate in the gig economy. We call HyreCar the Airbnb for wheels.”

In addition to individual vehicle owners, HyreCar is aggressively going after business from dealers and rental car companies who find themselves with unsold vehicles that could otherwise be generating revenue. Indeed, Furnari said the company is looking for dealers and car rental companies to account for about 75% of its business within “the next two or three quarters.”It’s all part of what Furnari says is a move to a mobility- as-service concept. “It’s seamless intermodal transportation with the touch of a button,” he said.“You have fleetsthat will beconnected on-demand and ultimately autonomous five or 10 years out.”

In October HyreCar announced a joint venture with Dave Haley, CEO of American Business Insurance Services and Peter Foley, CEO of LILCHA Holdings to create what it terms an “insurance captive designed specifically for car sharing in the ride-sharing space.”

When a driver rents a car through HyreCar, the company’s captive covers the insurance, taking the burden off both the driver and the owner. But earlier this year, HyreCar went a step further introducing a novel approach to covering the vehicle when it’s just sitting idle, or as Furnari terms it, “laid up,” leading to naming the product, “Lay Up Insurance.”

“It’s essentially covering that car when it’s laid up outside the HyreCar platform and it automatically turns on when that car is not rented and turned off when that car is rented,” said Furnari. “With lay up insurance you would not need personal insurance. You would use lay up insurance to get it plated and tagged that lay up insurance, what we’ve seen is it’s almost 50% cheaper than havinga personal insurance.”

In a release, the company said the availability of lay up insurance has led to an increase in the number of vehicles offered per owner from 2.3 to 5.1, and HyreCar estimates the creation of the captive will help it save about 25% of its insurance costs. The company says it spent approximately $4.5 million on insurance this year.

Sam Mylrea, CEO, PureCars, based in Atlanta, GA.

Pure Cars

HyreCar’s concept is a good idea, says Sam Mylrea, CEO of online digital auto attribution company PureCars, which tracks consumer vehicle shopping and buying activities. In emailed comments Mylrea points out a key difference between HyreCar and General Motors Corp.’s Maven car-sharing service saying, “HyreCar is really solving a problem for car owners and dealerships that have unused vehicles sitting around, and allowing ride-share drivers an alternative means to utilize a car for work. On the other hand, GM’s Maven is more geared towards improving mobility at the consumer level given the focus is peer-to-peer.”

So far HyreCar seems to have found a sweet spot. It now operates in every state and is expanding its roster of dealers and rental car companies. Last month it reported a 224.3% increase in revenues through the third quarter to $2.7 million from $0.8 million during the same period in 2017 but net losses grew to $1.8 million from $1.3 million during the first nine months of 2017. Furnari attributed the widening losses to the costs of expanding the business to support revenue growth and told investment analysts on a conference call discussing Q3 results he expected the company wouldachieve “operational cash flow profitability” during the second quarter of next year, saying “we’ve turned a corner.”